Our client is a 1000+ bed tertiary hospital on the Atlantic Seaboard, which features a children’s hospital, a level one trauma center, and one of the largest transplant centers in the U.S.  The client employs a broad range of specialties, from primary care to transplant surgeons.

Compensation methodology for those employed physicians had historically not been consistent across specialties or within a particular specialty, and largely focused on a base salary model that did not incorporate bonuses for productivity or quality.  The result: the client was experiencing unnecessary practice losses due to lack of productivity, and dealing with an administrative nightmare of reconciling the different types of contracts each month and quarter.

How HSG Helped

HSG brought together a steering committee composed of the executive team, board members, and physician leadership and provided education regarding industry trends in compensation planning, aligning economic incentives, and considerations for financial stability and compliance.  HSG then facilitated group discussions that resulted in the identification of four key issues the new compensation plan must address:

  • Program sustainability
  • Quality and productivity incentives
  • Flexibility to expand quality incentives as reimbursement environment changes
  • Total compensation package within fair market value

HSG then developed term sheets that incorporated these components in the structure of the compensation agreement.  The combined group reviewed and approved the new term sheets.


By using a process that incorporated key stakeholder education and the direct involvement of physicians in the creation of the compensation methodology, the client was able to achieve a greater level of buy-in from the employed network as a whole.

The new compensation methodology is being applied to both new recruits and existing contracts as contracts expire.


Neal D. Barker

Partner and Managing Director, Compensation and Compliance